Set in Stone
studies the evolution of End User License Agreements (EULAs) by comparing their 2003
content to their 2010 content. The article provides a wealth of data
about EULA development based on company type, product type, term type, word count, “bias”
toward seller or buyer, innovative terms, legal representation, and impact of
litigation on terms.

The article focuses on changes in EULAs’ relative buyer-friendliness.
For example, a EULA that has changed to inform buyers of their right to return a
product has become relatively more buyer-friendly, but a EULA that has changed
to allow a seller to remotely disable a buyer’s software is relatively less buyer-friendly.

The article concludes that EULAs are becoming relatively less
buyer-friendly. Surprise!

Data provides the great joy of quibbling over its meaning. For
example, is a EULA that informs buyers they can return a product really buyer-friendly?
Such notice may render the EULA more enforceable, which actually may be more seller-friendly.
But quibbling aside, Set in Stone makes
a major contribution simply by giving us a treasure trove of data.

A few thoughts on this important article:

More data, please:Set in Stone measures EULAs’ relative
buyer-friendliness, but it acknowledges that it lacks the price information we would
need to determine whether EULAs are increasing welfare or merely redistributing
wealth. This is the big question, isn’t it? Hopefully some enterprising, empirically-minded
scholar will relate Set in Stone to the
relevant pricing data and tell us whether we’re better off now than we were ten
years ago.

Democratic
degradation:Set in Stone does
provide evidence of the democratic degradation described in Margaret Radin’s Boilerplate. Set in Stone notes that EULAs increasingly include terms that allow
sellers to control buyers’ performance through technological means as opposed
to litigation. For example, some EULAs allow sellers to remotely terminate a
buyer’s ability to use software when the seller deems the software has been
misused. Isn’t this like a liquidated damages clause that lets the seller
unilaterally determine the buyer has breached and
provides the buyer’s ATM pin number? Should buyers have their day in court
before sellers enjoy their remedies? Even if buyers were receiving price
discounts in exchange for their legal rights, we might think such seller self-help
mechanisms are contrary to our basic political arrangements.

Lawyers as product
engineers:Set in Stone suggests
that EULAs are more susceptible to innovation than other contracts. So, if
contracts are product components, perhaps lawyers can engineer better products.
Entrepreneurial lawyers could identify EULAs containing inefficient terms and revise
them to create economic surplus. Lawyers could be trained to identify and eliminate EULA inefficiencies. In-house lawyers could be transformed from cost centers to
profit centers. And all without doing any math! Well, we might have to
do some math.